Research from specialist buy-to-let lender Pepper Money suggests around 220,000 households \u2013 roughly 5% of the PRS \u2013 could leave the sector by the end of 2026. While those headline figures reveal a major structural shift in landlord behaviour, their more immediate impact will be on creating a growing mismatch between supply and demand that is unlikely to ease in the near term.<\/p>\n
More than 65,000 of those landlord exits are the direct result of the introduction of the Renters\u2019 Rights Act (RRA), which comes into force from May 1 2026. The legislation will introduce significant changes to tenancy structures, notice periods and compliance requirements, prompting many landlords to reassess the viability of their portfolios.<\/p>\n
The RRA\u2019s impact is expected to be felt most acutely by smaller landlords. Those with a single property are twice as likely to exit as those with larger portfolios, accelerating an already growing trend towards a more consolidated and professionalised sector. Although larger operators may be better positioned to absorb regulatory and cost pressures, they are not currently expanding at a sufficient pace to offset the loss of so many smaller landlords.<\/p>\n
That increasing imbalance is likely to be a key driver of the outlook for rents and yields. In addition, with only 5% of landlords having purchased a new rental property in the past year, and build-to-rent delivery still subdued, the pipeline of new supply remains constrained. As a result, the rental homes leaving the sector are unlikely to be replaced quickly enough to prevent a tightening in supply, boosting rental prices and, in turn, yields and investment returns.<\/p>\n
And that dynamic is playing out against a backdrop of long-term undersupply. Although the PRS has expanded significantly over the past 15 years, the number of homes available to rent remains around a third lower than a decade ago, according to recent Rightmove data. Even where supply has improved marginally year-on-year, it has still failed to keep pace with demand.<\/p>\n
And there are some key regional pressure points. The South East is expected to see the largest overall reduction in rental stock, with more than 46,000 homes projected to exit the market. With average rents already close to \u00a31,900 per month, the removal of such a significant proportion of rental stock is likely to intensify competition among tenants and exert major upward pressure on rents.<\/p>\n
Similar patterns are emerging in other high-cost regions, too. London, the East of England and the South West all combine relatively elevated rents with notable levels of projected landlord exits, and affordability pressures could become even more pronounced as availability tightens.<\/p>\n
The North East has the highest proportion of landlords intending to sell, with around one in five expected to do so. However, due to the smaller size of the rental market in the region, this translates into a lower overall share of national exits. Even so, it points to a significant shift in landlord sentiment that is far from being confined to the higher-value markets.<\/p>\n
Paul Adams, Sales Director at Pepper Money, says: \u201cOur research highlights how the combination of changing legislation and rising operating costs is prompting many landlords to review their portfolios. It\u2019s important to recognise the potential unintended consequences for supply and pricing at a time when the sector is already under pressure.\u201d<\/p>\n
From an investor\u2019s perspective, the changing rental landscape offers some real benefits for those with professionally run properties. The supply shortfalls will inevitably lead to rising rents and yields and decreasing levels of competition. For any accidental landlords with self-managed properties, the new regulatory requirements are likely to be onerous, unless they seek professional help.<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
A projected wave of landlord exits from England\u2019s private rented sector (PRS) is set to exacerbate supply shortages and put sustained upward pressure on rents, as new regulations and rising costs reshape the sector. Research from specialist buy-to-let lender Pepper Money suggests around 220,000 households \u2013 roughly 5% of the PRS \u2013 could leave the… Read more »<\/a><\/p>\n","protected":false},"author":4233,"featured_media":6107583,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[59,765,766],"tags":[160],"class_list":["post-6107580","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-trending-news","category-property-investment","category-uk-rental-market","tag-rental-supply"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6107580","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/users\/4233"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/comments?post=6107580"}],"version-history":[{"count":2,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6107580\/revisions"}],"predecessor-version":[{"id":6107582,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6107580\/revisions\/6107582"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/media\/6107583"}],"wp:attachment":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/media?parent=6107580"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/categories?post=6107580"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/tags?post=6107580"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}